Bay Delta Conservation Plan Economic Benefits and Financing Strategies September, 2012

1. Bay Delta Conservation PlanEconomic Benefits and Financing StrategiesSeptember, 2012

2. Sacramento-San Joaquin Delta: California’s Water Epicenter

3. A Vulnerable & Incomplete System • Past generations invested in a network of dams, aqueducts and pumps to move water around the state • 100-year-old man-made levee system is old and fragile • Much of the land has subsided below sea level • Future sea level rise and changing weather patterns will put greater pressure on the levees

5. “Should the Delta levees fail, the consequences are likely to be sudden and catastrophic for local residents, landowners, Delta species, and water exporters.” -Public Policy Institute of California

6. A retrofit of the existing system that secures it from risk of flood, earthquake and sea level rise in the Delta is the most sensible approach

7. Southern California Water Committee Funding Agencies • Castaic Lake Water Agency • Coachella Valley Water District • Mojave Water Agency • The Metropolitan Water District of Southern California • San Bernardino Valley MWD BDCP Public Outreach Economic Benefits and Financing Strategies Paper (PFM)

8. BDCP Capital Costs

9. Investing In The Seismic Retrofit • Project is prudent, affordable & urgently needed • Cost of the water conveyance project would be covered by public water agencies • ~$10 billion • Project would be financed over many years • No state general fund dollars involved • Broader funding sources, including potentially voter approved bonds, would pay for environmental improvements

10. Economic Benefits of BDCP “Significant Economic Benefits” • Economic impacts due to loss of Delta supplies due to Seismic, Flood, and Sea Level Rise: • Estimated 65,000 to 230,000 jobs lost • Billions of dollars of economic activity depending on duration and timing • Water supply reliability and water quality improvements • Salinity • Drinking Water Quality • Avoid regulatory shortages • Job Stimulus • Construction of Delta Water Conveyance (129,000 jobs) • Ecosystem restoration (40,000 jobs)

11. Water Quality Benefits to So. California • SWP salinity averages about 270 mg/L over past 20 years • BDCP conveyance will reduce to about 100 mg/L • Economic Benefits: • Long term salinity reductions worth about $200 million per year • Drinking water benefits of lower bromide, THMs, will result in lower treatment plant capital and operating costs

13. BDCP Debt Financing • PFM traditional revenue bond financing consistent with DWR practices-Capital costs range from $12-$14 billion • Four bond issues during construction (10-12 years) • Total Debt Service: $1.1 billion

14. An Investment Long Overdue

16. Historical Cost Comparisons

17. Historical Cost Comparisons • CRA was funded at market interest rates (4-5%) with no grants / subsidies

18. Report Published in March 2012with Fact Sheet and Power Point www.socalwater.org Thank you!